Make Room for Windows TV, Another Box to Sit Under Your Telly

Deciding it won’t just surrender your living room to Apple, Google, Netflix, Roku and a host of other set-top box makers, Microsoft is about to enter this market in a big way, possibly making an announcement at the CES show this week. According to The Seattle Times, the Redmond company will leverage its strong living room presence and combine it with the Windows brand in order to gain advantage over rival companies in this space:

Microsoft’s going to make a splash in this market with a stripped-down version of Windows tailored for set-top boxes and connected TVs.

The software is a version of its embedded device software, overlaid with the Windows Media Center interface, with media streaming and remote-control capabilities.

The boxes should be priced about $200, which is way more than the $99 Apple TV, and are described as having "a polished and familiar TV-program guide that makes it easy to blend and navigate both online and broadcast content."

Although your living room is already a crowded space where multiple set-top box vendors are vying for your attention without a clear leader in sight, some watchers think so-called connected TVs will make set-top boxes obsolete.

Connected TVs typically combine Internet functions with set-top box features to provide an all-in one entertainment solution. DisplaySearch estimates that connected TVs would reach 125 million shipments by 2014, a significant increase over just under 50 million devices shipped globally in 2010.

The upcoming CES will serve as a launchpad for next-generation connected TV sets. Google is absent from the show and the company warned its partners to pull Google TV products until the search giants refines its software that received much criticism, leaving the partners that backed and invested into the project dumb-founded.

Let’s not forget Netflix that accounts for 20 percent of peak Internet traffic in the US and is seriously contemplating worldwide roll-out in 2011.

Some analysts repeatedly said Apple would debut a connected TV product of its own in 2012. Other watchers warn that broadband Internet has its limits and cannot scale forever to accommodate data-hungry content like HD video channels.

Microsoft TV, however, could spoil both Google’s and Apple’s plans. If anything, Microsoft has the market power needed to make a splash and it’s ability to negotiate premium content deals with Hollywood shouldn’t be underestimated. In addition, they enjoy a lot of credibility in this space thanks to their successful Xbox 360 console.